Wednesday, November 07, 2018

MDIF launches media loan fund with Sida-backed first-loss protection - ITTREALMS

The Media Development Investment Fund (MDIF) launched an MDIF Media Finance I, a blended-value loan fund for independent news media companies in select emerging and frontier markets, reports ITREALMS.

In a ground-breaking partnership MDIF, a New York-based investment fund for media companies in countries where access to information is limited, and the Swedish International Development Cooperation Agency (Sida) are providing investors with 55 per cent first-loss protection.

The fund will provide up to USD6 million in affordable debt to small- and medium-sized enterprises (SMEs) in the media sector with high social impact – outlets that provide the news, information and debate that people need to build free, thriving societies – and pay investors a 4 per cent annual coupon.

ITREALMS also reports that the loans will finance investments in software, equipment, content production and work-space, as well as working capital and short-term cash-flow needs. Prospective borrowers are based in countries such as Myanmar, Ukraine and Malawi.

“MDIF Media Finance I offers investors 55% first-loss protection, 4% annual interest and high mission impact, a highly attractive combination,” said Harlan Mandel, MDIF CEO. “The fund builds on MDIF’s 20 years of media investment experience and will provide financing that enables independent news businesses to compete with state-supported and other captured media. It will help news entrepreneurs in emerging markets to build strong businesses while providing the public with reliable news that isn’t available anywhere else.”

The loan fund adds to MDIF’s existing vehicles for providing debt and equity financing to news and information companies in countries with limited access to reliable information. Sida will also provide grants for technical assistance, enabling MDIF to provide strategic advice and management capacity building services, to help investees optimise their businesses.

“Sida has cooperated for many years with MDIF on a grant-basis so we are very much aware of MDIFs special qualities,” said Eva L√∂vgren, Head of the Sida Department for International Organisations and Policy Support. “We are quite excited over this possibility to help MDIF attract private capital for investments in independent media actors, as independent media is of crucial importance to peaceful democratic development. Independent and professional journalism is challenged today and we believe that reasonable loans are very much sought after by most media houses.”

MDIF is a New York-registered non-profit corporation, providing debt and equity financing to independent media businesses in countries where access to reliable quality information is under threat. Since making its first loan in 1996, MDIF has provided more than $155 million in financing to more than 100 media companies in 39 countries, returning $38 million to investors. It currently manages $59 million in outstanding loans and equity investments.

Nenye Dom/GEE

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